Office of Fair Trading launches eBook price investigation

I’ve written quite a few pieces on this blog over the last several months about the pricing of eBooks, and in particular the price war that has failed to emerge following the launch of the Kindle in the UK.

In fact, prices have gone up, due in no small part to the publishers attempting to introduce a digital equivalent of the old Net Book agreement, in the form of Agency Pricing. This, essentially, allows them to force sites like WH Smith or Amazon to sell the electronic editions of books at a specific price, with no discounting allowed.

Discounting is still allowed on the printed editions, and the net result – aside from some dramatic increase in the prices of some eBooks – is that it’s quite common to find that the electronic edition of a book will cost more than the paper edition.

Now, I’m not one of those people who thinks that the cost of an electronic book should be more or less nothing, because as a writer I actually enjoy being paid for what I do, and the cost of producing a book involves a lot more than just printing it – design, typesetting, proof reading, and editing, for example. Those are all important if, like me, you prefer that when you read a book, characters’ names are spelt consistently, line breaks don’t appear half way across a line in the middle of a word, and chapter or paragraph breaks actually make it into the book – all problems that crop up in various eBooks, and make people even more annoyed when they’re forced to pay a higher price for a poor quality product.

You can’t take all the costs out of producing an eBook, if you want it to be of good quality. But you could probably reduce some of them, and I can’t honestly see a reason why shops should be allowed to discount print editions, but not electronic ones. Or indeed why you can’t get an electronic, searchable edition, when you buy the hardback.

So, I welcome the announcement today by the Office of Fair Trading that it’s going to investigate the pricing of books. Though, given colour of the current government, I doubt they’ll actually decide to do anything that’s in the interest of consumers, rather than shareholders.

For more on this topic, you might want to look at The Register’s take on the news, and the piece I did for them about eBook pricing a couple of months ago.

My roundup of eBook price changes from August to November 2010 is also worth reading, and if you want an insight into the collective lunacy of the publishing industry when it comes to eBook lending, then read this article.

There’s also an article about this at eBook Magazine, which is well worth a browse.

eBook price roundup – figures collated

Today, my latest piece on eBook prices has been published on RegHardware, and it’s generating quite a lot of comments. A few of those have suggested using public libraries as an alternative source of borrowing books – it’s worth reading this to see why that may not be such a simple option.

For those who want to recap, I’ve been tracking the prices of some eBooks here since Amazon launched Kindle, and comparing with how much I paid originally for some that I bought from Waterstones.

The first comparison is from August of this year. A collection of eBooks that originally cost £203.39 from Waterstones (some bought when VAT was lower) would now cost £239.59, or just £158.97 from Amazon, or £205.61 from WH Smith. Adjusting the original prices for the current 17.5% VAT rate would give £205.56.

In late August, I looked at just four books that I bought to take on holiday. Amazon: £17.12. WH Smith: £17.18. Waterstones: £33.86.

Around the end of October I checked prices again. At this stage, some of the titles in my comparison weren’t available from WH Smith and Waterstones – it turns out this was a prelude to the introduction of agency pricing. I was able to compare 21 that were available then and in August. Amazon: August £87.16, October £84.30. WH Smith: August £110.95, October £108.26. Waterstones: August £113.10, October £130.43.

Finally, for the November comparison I as published in RegHardware, most of the books are now available, so I can give a price again for the full 36 title selection. (Where some are not available on certain stores, I’ve used the publisher-set price quoted on Amazon, which it’s likely all will have to sell for eventually).

That gives the November prices: Amazon £184.62. WH Smith: £205.95. Waterstones: £227.95.

Here is a graph for the 21 book set. Note that three books were shown as not available from WH Smith but were priced identically at the other two stores, and I have used that price to compile the graph.

Chart showing price of a 21 eBook bundle between August and November, from 3 UK retailers

eBook pricing update: where have my favourite authors gone?

Price wars are great, aren’t they? Consumers always win, apparently. So, the launch of Kindle in the UK should have heralded a new dawn for eBooks, with prices falling thanks to greater competition, and everyone happy with their lovely new Sony models, or the latest version of the Kindle.

The world of publishing and bookselling, it seems, has other ideas. I wrote not that long ago about the new version of the WH Smith eBook store, and when Kindle launched I compared the prices of a selection of books – essentially looking at those I’ve bought, and comparing what the price would be to buy the whole collection again for Kindle, or just to buy them all now, if I were starting from scratch. Essentially, a year’s worth of book buying from Amazon would save me enough to buy a Kindle too.

Surprisingly, prices appeared to have gone up. At the end of August, I did a quick comparison of prices, with just a few books. A couple of months on, and I thought I’d repeat the comparison, looking at the prices of the same collection of thirty six books in electronic format that I originally compared at Amazon UK, Waterstones and WH Smith.

That turned out to be an impossible task; I’ll be going into the reasons in more detail in an article for Register Hardware, but essentially a lot of the books are no longer available to UK readers in electronic format. For example, none of the Iain M Banks culture books can be bought as ePub at the moment, though you’ll still find them on Kindle. Nor is there anything by Qui Xiaolong, Ian Rankin, or Stephen Baxter. Of the thirty six books I used in my previous price comparison, only twenty one are now available regardless of which of the three stores you use. One title is not available at all now, but the bulk of what’s gone missing is common to Waterstones and WH Smith with Amazon so far unaffected.

How much?

Taking these twenty one books, the cost at Waterstones (reasonable search engine, reliably high prices) is £130.43. WH Smiths (better pricing, truly horrible web site) is £108.26, while Amazon’s UK Kindle store would charge you £84.30, leaving plenty of cash left over to buy all the books that the other stores don’t even have at the moment.

Going back to the August prices, to buy those twenty one books at WH Smiths would have cost £110.95, so they are a little cheaper now, as are Amazon, where they’d have cost £87.16 while Waterstones ploughs their own furrow, defying logic by increasing the price – you could have bought those twenty books for £113.10 in August.

That’s a 3.2% fall at Amazon across these twenty titles as a whole, 2.4% at WH Smiths while – bless their little capitalist socks – Waterstones have put prices up by 15.3%.

Some price war, eh?

Friendly fire

Of course, some of the blame for this is certainly not the bookshops. It’s the publishers, who resolutely refuse to understand digital media; the absence of major authors like Ian Rankin and Iain M Banks in ePub format is most likely the result of the imposition of ‘agency terms’ by some big publishers. Essentially, if you’re going to sell their books, they want you to sell them at the prices they set. Can’t have eBooks getting too cheap and affordable, can we?

Hopefully, the absence of some major authors from eBook stores will be temporary – but in the meantime, you could be forgiven for thinking that publishers really do want to hand all the cards to Amazon – they’re the cheapest and, for whatever reason, they are now the ones with the biggest range of books, some of which UK readers cannot, right now, buy electronically in a format compatible with their own devices.

If I were an executive at Sony or any other maker of ePub readers, I’d be asking my PA where to find voodoo dolls of publishing execs round about now.

Update: 26th November. Just checked the spreadsheet, and it’s 21 books, not 20. But since I’m not working out average prices, it makes no real difference.

Why are British bookstores digging the grave for ePub?

WH Smith’s new ebook store – confusing and messy

When I compared prices of ebooks at the end of August, I noted that the pricing from WH Smith was pretty competitive; for a bundle of four books that I stocked up on before going away on a trip, it cost six pence more than from the Kindle store, and £16.68 less than buying the same books from Waterstones.

I’m going to compare my whole collection of books across the stores again soon, to see if there’s been much of a change in pricing since the launch of the UK Kindle.

Meanwhile, if you used the WH Smith store before the middle of September, you might have noticed that it was operated for them by Overdrive. Overdrive is a big player in ebooks, and run the web sites for various libraries as well.

There were some drawbacks to the Overdrive-powered store; one was that you had to register separately from the rest of the WH Smith online store. And searching wasn’t that easy. I said in my last post that I could go on for ages about the awfulness of the WH Smith site.

But now there’s no point; on 15^th September I received an email telling me that the WH Smith ebook store had moved. It’s now properly integrated with the rest of the WHS site, and presumably run directly by them.

I’d love to report that this has made all the difference, and it’s now a smooth, easy experience, with simple straightforward searches, and a slick, glossy user interface.

The new WH Smith store

If I said that, I’d be lying. If anything, it’s even more frustrating than the previous incarnation powered by Overdrive. It seems to me that the search function is even worse, and on the ‘Advanced’ search screen, while they do actually say ‘Author’ instead of ‘Creator’, like normal human beings, you can’t specify that you only want to see ebooks in the results. You have to get the whole lot, and then narrow the results down.

Browsing is a nightmare; I like the odd bit of science fiction, but it’s pretty hard to find. Click the ebooks tab, choose Fiction, then ‘Sci Fi, Fantasy and Horror’ section, to find 691 books. Then there are sub categories for ‘Fantasy fiction’ and ‘Horror fiction’ but not for Sci-Fi.

So, if you want to find a nice bit of space opera to read, you have to wade through the whole collection; of course, you can narrow it down to ePub only, or by price, but that’s still a lot of books. And, with all due respect to the readers of vampire novels, I really don’t want to have to work through pages and pages of stuff about excitable girls swooning at men with fangs, to see if there’s any science fiction.

Search for Peter F Hamilton in the Fiction section, and WH Smith will find ten titles

If you do, you’ll quickly conclude that, actually, there probably isn’t. Even if you search with the results for, say, ‘hamilton’, you won’t find any books by Peter F Hamilton once you’ve narrowed down your results to that ‘Sci Fi, Fantasy and Horror’ category. Which is decidedly odd, because if you search for him from the top level, you’ll find ten of them.

Even more bizarrely, if you enter a single word like ‘peter’ or ‘hamilton’ in the box labelled ‘Search with results’ you get at least a search (even if not the results you’re expecting). Now browse to the ‘Sci Fi, Fantasy and Horror’ ebooks section, type ‘peter hamilton’ into the same box, and instead of the results, you get a listing of the whole of the Fiction ebooks category, some 38,000 books.

Search in the 'Sci Fi, Horror and Fantasy' section, and you won't find anything. You might even get dumped back at the Fiction list of 38,000 titles

Typing ‘peter hamilton’ into the box when you’re in the Fiction category does work, though.

So, congratulations, WH Smith, you’ve managed to make your ebook shop even more confusing than it was before, with a broken search system, and miscategorised books (and, incidentally, importing previous sales from the old shop, claiming they were from 2005 rather than August this year).

In the end, I resorted to browsing the Waterstones shop, and then when I’d found a book that looked interesting, typing the title into WH Smith’s shop, and buying it from there.

This, it hardly need be said, is a far from ideal situation, and something that the makers of ePub readers need to shout about, and bang heads together. The two biggest and most well known booksellers in the UK are so inept at selling ebooks that they must surely be helping to hasten the demise of ePub and the supremacy of Amazon and the Kindle ecosystem.

WH Smith might manage to roughly match Amazon on price, but their bookshop is a horrible experience. Waterstones does have a better search engine, but it’s still a bit clunky, and their prices are ridiculous.

With jokers like this serving the public, Amazon doesn’t even really have to try.

A lack of polish: I bought those books in August 2010, not September 2005. And 'Dummy text' ? Didn't anyone test this site?

More pricing madness with ebooks

I’ve just been looking for some books to pop on my Sony Reader for a forthcoming trip. I was going to get them from the Overdrive Library – I’m in Hackney, so there’s a small selection of titles available – but the website wasn’t letting me log on.

So, I decided to have a look at the WH Smith site, for a change, rather than Waterstones. It reminded me, once again, why I tend to use Waterstones, which is only mildy annoying to navigate, as opposed to the out and out bonkers train wreck of the WH Smith ebooks site. What’s wrong, for instance, with using sensible words like “Author” when you’re searching? Who on earth thought referring to “Creator” would make things sound more friendly? I could go on at length about the awfulness of the Smiths site, but I’ll save that for another day.

The main point of this is book prices. As I mentioned before, in the face of Amazon’s arrival in the UK, the prices at Waterstones appear to have gone up. They told me that, of course, some of the titles might have been on promotion when I bought them, especially if they were new releases.

Ok, so how about “The Fuller Memorandum” by Charles Stross? That was published in July of this year; it’s £4 at WH Smith or Amazon, and £7.54 at Waterstones.

And the ebook of Peter James’ “Dead Like You”, published in June this year? That has an RRP of £18.99, which is excessive for an eBook however you look at it, in my view. At Waterstones, they think they’re doing you a favour by discounting it to £13.29, while at WH Smith you can just pay £6.46 instead, and £6.44 at Amazon.

Two other titles for my reader, “A Quantum Murder” by Peter F Hamilton, £7.54 at Watersones, £4.00 at the Amazon and WH Smith. Stieg Larsson’s “Girl with the Dragon Tattoo” is £5.49 at Waterstones, £2.72 at WH Smith, and £2.68 at Amazon.

Total price for these four books? I paid £17.18 at WH Smith; if I had a Kindle, I’d have saved six pence. And if I’d gone to Waterstones, it would have cost me £33.86, or £16.68 more; that’s a 49% saving.

You can argue that competition is healthy, and the great thing about ePub and devices such as the Sony Reader is that you can shop around for your books. You could also say that, when companies like Waterstones charge so much more for books, it’s a damn good thing too.

eBook formats – a crash course

Following on from my post about book pricing in the UK and the related news item on RegisterHardware, I thought I’d outline where things stand with regard to the different types of eBook available in the UK, as it’s fairly important information if you’re thinking of investing in a reader.

The most important thing to remember is that not all books can be read on every reading device, and material for some can only be bought from certain places. In other words, it’s much more restrictive than the world of paper books where buying one book from Waterstones doesn’t, for instance, mean that you can’t buy anything from Amazon in future.

Three way split

For the sake of  simplicity (and because it covers most of the market) it’s simplest to say that there are three main eBook ‘ecosystems,’ each made up of reading devices, a format for the books, and one or more stores that sell books in that format. There is some overlap, which I’ll explain later. But the main thing to remember is that there are three different solutions. First, is what I’ll call ‘Amazon/Kindle’, then there’s ‘ePub/ADEPT’ and then there’s ‘ePub/iPad.’

Also, note that here I’m concerned only with paid for books that have protection; things are different if we’re talking about those you’ve created yourself, for instance. And I’m not going to touch on ‘converting’ books from one format to another, or older formats like Mobipocket.

The Amazon way

Kindle is the name everyone’s heard of when it comes to eBooks, and it’s an Amazon product. The Kindle reader understands books bought in its own format, which is sometimes referred to as ‘azw.’ As with most bought books, these are copy protected, so they can’t be distributed freely, and if you want to buy books for Kindle, then you have to go to the Amazon store.

ePub and ADEPT

Not everyone wants to have to buy books from one place, and there’s a common format called ePub, which is designed for eBooks. Lots of people make readers that can work with this, like the Sony Reader series, the Cool-er, and quite a few others. To provide security and stop books being copied, most of the people who sell books in ePub format use a protection system from Adobe, called ADEPT; you’ll also hear it referred to as Adobe Digital Editions, which is the PC and Mac software you use to download books you’ve bought. As well as allowing books to be bought, there are libraries that allow you to borrow books in the ePub/ADEPT format; after a set time, the book ‘expires’ so you can’t read it any more.

ePub and iPad

When Apple launched their iPad and announced that it would have a built in book reader and shop system, called iBooks, they made a big fuss about how it used the ePub format. What they made less fuss about is that – unlike almost every other reader and store that works with ePub – they aren’t using ADEPT. Instead, they’re using their own protection system, which means that if you want to buy a book and read it in the iPad’s own application, then you have to buy it from Apple’s store, just like you have to go to Amazon to buy books in the Kindle format.

Confused? Already?

That’s the basic information. What does it mean to you? Well, on the face of it, that means that if you buy a book from Apple’s store on the iPad, even though it’s in ePub format, you won’t be able to read it on a Sony Reader, because it uses Apple’s protection system, rather than ADEPT.

And if you have a collection of eBooks that you have bought from, say, the Waterstones online store, they’ll all be in the ePub/ADEPT format, so you can’t read them on the Kindle, nor can you read them on the iPad.

And, if you’ve bought a book from Amazon for your Kindle then, no, you can’t read it on your Sony Reader.

So far so good. Now – and I shall attempt to do this without resorting to a Venn Diagram – things become a little murkier, because it’s not quite as cut and dried as all that.

All aboard

Amazon really wants to sell you things. Lots of things, and not just books, though that’s what they’re famous for. They sell eBooks very cheaply but while the Kindle is the thing you’ll have heard of, it’s not the only way to read them. There’s also a Kindle app for the iPhone, iPad, as well as Windows and Mac PCs, Blackberry and Android phones. So, you can buy books from Amazon and read them on all these devices. Amazon’s system even remembers where you were in a book on one device, so if you pick up the same book on another, you’ll go to the right place.

And yes – iPad is included as one of those devices, so if you have one, there’s a choice of two places to buy your books now – Amazon or Apple’s own store. You’ll have to use a different application, depending on which books you read, though – the iBooks app won’t read the Kindle books, and the Kindle app won’t read the book s from Apple’s store.

It’s also been reported that Waterstones is planning to produce an app for the iPad, which will allow you to read books you’ve bought from their shop on Apple’s tablet. Until it comes out, it’s impossible to say if it will let you read any ePub/ADEPT book, but I would imagine that’s going to be the case.

So, though you may need different applications for books from different stores, it does look as it, when it comes to portable devices, the iPad will cover all the bases. Just a shame, then, that in my view it’s too heavy and too expensive and with the wrong sort of screen to be bought  purely as a dedicated reading device.

Left out?

What about dedicated readers, such as the Sony models and the Kindle? Well, because of the way they’re designed, you can’t load extra software on to them, the way you can add the Kindle app to the iPad. So, whether it’s a Sony Reader, or a Kindle, you’re stuck with the books that are compatible, and you can’t read anything else.

On the positive side, there are a lot of bookstores you can use if you have a reader that supports ePub/ADEPT, as well as public libraries. A shame about the book prices, though.

Also worth a mention is Kobo Books, who sell books in the ePub/ADEPT format, and have applications that allows you to read them on a range of smartphones too.

Note: Some links on this page include my Amazon associates ID.

Why I have mixed feelings about eBooks

I love my Sony Reader; it has a great screen, excellent battery life, and I can read outdoors in bright sunlight. But I still have mixed feelings about eBooks. Why? Well, there are a number of reasons.

First, there’s the issue of book prices, about which I wrote at the weekend. It’s always astonished me that, at least until the arrival of Amazon’s Kindle Store, you could actually end up paying more for an electronic version of a book than for a print edition.

Something that has had the physical printing and distribution costs taken out of, and doesn’t need the marketing incentives that chain bookstores insist on being paid to put a new novel on the table by the door, still costs more than the print version. It’s as if the publishing industry has looked at how the music industry handled the transition to digital and thought “Yep, we like train wrecks. We’ll go for that.”

A bit of imagination wouldn’t go amiss here; first, cheaper prices for eBooks should be possible; I know there’s the need for infrastructure, servers, and licenses for the Digital Rights technology, but I’m still pretty suspicious that that makes an electronic file worth as much as a hardback. What I’d love to see is innovative pricing – like “Buy a print edition, and get the electronic version for £2 extra,” so that I could have a searchable version on my laptop, or a copy on the Sony Reader to save weight when I go on holiday.

Price isn’t everything

Price, however, isn’t the biggest concern I have with eBooks. It’s to do with the market and the place for small bookshops within it. When I buy a print book, I never buy it by mail order, or even from a chain bookstore. I go to my local bookshop, the Stoke Newington Bookshop, and buy it there, or ask them to order it. If I’m visiting family in Winchester, I go to P&G Wells. We also have another good bookshop, Pages of Hackney, nearby, though I’ve not yet been in there.

And, I don’t mind paying a bit more to buy books from these bookshops. I think it’s vitally important that there are good independent bookshops. I appreciate that some people like the fact that you can get the latest Harry Potter at a discount in the supermarket, when you pick up your groceries. And if all you want is the most popular books, that’s fine.

But some people do want other stuff. They might want more political books – whether fiction or non-fiction. They might want gay books, or any of a range of things that, frankly aren’t going to find a space on the shelves in a supermarket. There are still specialist bookshops, like Gay’s The Word, but those are dwindling in number.

And what happens if the specialists and the small independent bookshops vanish? Those who want the more obscure books will find that they have little choice but to buy online, and many will be unwilling – or unable – to do that.

A person confused about their sexuality might be willing to buy a book and pay cash, but many will think twice if it means handing over their credit card and address details to a faceless corporation; some readers may recall the fuss in the USA when it was suggested that details of what library books people borrow could be requested by law enforcement organisations. Many people simply don’t like the idea of someone else, especially in authority, knowing what they’re reading.

So, whether it’s for their friendly, informed service, their promotion of local authors, and willingness to cater to the local community – or just the fact that you can walk in there and pay with cash – local independent bookshops are vital in ensuring that there’s a range of books available, beyond the big names that the chains and supermarkets want to sell and promote.

A white label store

And that causes me a dilemma; on the one hand, I want to support my local bookshops, because it’s vital to the idea of pluralism. But I like my gadgets, and I like the convenience of my Sony Reader, too.

Realistically, there’s no way that most independent bookshops could run their own eBook store. But I wonder if it’s possible to have a ‘white label’ eBook service. By that I mean something that’s run by several of them, or by an independent organisation, which allows bookstores to put their own ‘skin’ on it and, ideally, to highlight the books they think are important, and to set their own pricing, so that they can compete on a more level playing field.

Of course, there’s always the danger that few organisations can compete with the Amazon juggernaut, though Apple will doubtless try. But I’d hate to lose an ecosystem like the more open ePub/ADEPT one, where you can buy whatever reader you like, and buy books from wherever you like. I can stock up my Sony reader from Waterstones, or WH Smith, or any one of many other online stores. And I’d really like to include my local bookshop in that list.

I think it’s also possible for independent bookstores to add value, and give people another reason to shop there. They can bridge the gap between eBooks and the way books have traditionally been sold.

Imagine, for instance, if your local bookstore could retail eBooks, and even help you load them on to your device. So, people who don’t have a computer can take their reader along, and the nice young man behind the counter will be able to say “There you go, I’ve put your latest John Grisham on there, Mrs Higgins.”

And – though it might take some thinking about the mechanics of it – they could even do some of this anonymously, allowing people to buy eBooks with cash if they wanted, and rather than having to use their own email address to authorise their eBook reader, customers would have an anonymous account at the local bookshop.

I don’t think this idea presents any obstacles that are insurmountable, technically. How much would it cost? No idea. And I don’t know any booksellers to ask them what they think of the suggestion.

But I do know that local independent bookshops are too precious a resource to allow them to wither away, without at least trying to find a way for them to fit into an increasingly digital future.

Note: Some links on this page include my Amazon Associates ID.